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04 October
2018
 |
RBI
(The Total Investment & Insurance Solutions)
The Finance Ministry on Thursday said that the
$10 billion foreign currency loans that state-run oil-marketing companies
(OMCs) can raise for their working capital needs will have to be staggered over
a period of one year from now.
The
oil companies can raise $10 billion via External Commercial Borrowings (ECBs)
with a maturity of five years in a phased manner, with an initial tranche of $4
billion followed by two tranches of $3 billion each, in one year from now, the
ministry said in a statement.
The
ministry's statement follows the Reserve Bank of India's decision on Wednesday
to relax ECB norms for the working capital needs of fuel retailers. The RBI has
waived off the individual company limit of $750 million or equivalent and the
mandatory hedging requirements, as it seeks to stem the rupee's slide.
The
RBI has allowed the oil companies to borrow from all overseas recognised
lenders under the automatic route.
Further,
the RBI relaxed the requirement of a minimum average maturity of five years and
replaced it with minimum average maturity of three to five years.
The
move is seen as an attempt to encourage oil firms to raise their dollar
requirements from abroad, as the rupee has been hitting new lows against the
dollar amid hardening crude oil prices.
India
imports about 80 per cent of its crude oil requirements, and rising global
prices threaten to widen its current account gap, pressuring the domestic
currency.
The
rupee on Thursday hit a new low of Rs 73.77 to a US dollar.The Total Investment & Insurance
Solutions
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